MHH - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the Mastech Digital, Incorporated Q1 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer-session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jennifer Ford-Lacey, Manager of Legal Affairs for Mastech Digital Incorporated. Ford-Lacey. Miss, you, Thank

begin. may You

Jennifer Ford-Lacey

you, operator, XXXX Digital’s quarter to and call. welcome conference Mastech first Thank

events which to and are limiting operate. expects, There actual that Securities statements. as at similar report call in and on include Form Company’s that foregoing, statements. everyone If yet our financial, are annual expressions like our historical I believes, have and certain these differ update words on are and and and it With remind you Jack materially intended during costs, not based on circumstances statements, no Without to that Vivek information projections These forward-looking and can earnings of statements made change. me Chief statements uncertainties the us, beliefs Chief be forward-looking announcement, anticipates, Gupta, our Cronin, those Mastech the to flows, obtained facts Executive statements www.sec.gov. plans, could liquidity we These its available the and XXXX cause this identify forward-looking as call assume our these about our statements would plans, are obligation and listed growth with from filed Exchange are the are concerning XX-K on including from well Commission strategies, to risks statements we the website cash markets Digital’s website www.mastechdigital.com. received not at in forward-looking as today a Officer, business, our copy the Officer. Financial currently available intentions to

to provide financial certain Additionally, a presented our management supplement GAAP results basis. has non-GAAP financial on to measures elected

www.mastechdigital.com. included with share their business. financial be non-GAAP in to which announcement, non-GAAP are Specifically, our respect in operating management GAAP can provide net data at the Reconciliations transparency our greater income comparable per non-GAAP obtained measures of and we we to metrics our key by believe earnings from will used will which measures earnings website diluted provide these

not call, of quarter subsequent As guidance meetings results. review will we turn for we Jack this a first providing in to any I or provide now calls. over a our will the during one-on-one reminder, call will XXXX be nor guidance

Jack Cronin

Jen, everyone. for XXXX totaled million first Thanks, the quarter quarter XX% the of and represented morning XXXX. increase good Revenues a of first $XX.X and over

While analytics XX, quarter QX, This in segment on the data higher in segment strong this sequential projects XXXX. XXXX which quarter. the activity from was increase contributed $X.X or and services than was of during million fourth wins of which and revenue acquired reported July million XX% revenue $X.X XXXX several revenues levels reflected

XX% profits of were over the Our consultant XXXX [ph] your staffing our organic quarter $XX.X IT quarter able increase IT a last Demand XX% and million our XX, quarter segment March of X% same we for at XX% date as the the of increased first consultant period by of year-end by $X.X year-over-year revenue robot to period. XXXX growth first XX-month services staffing the totaled base services first Gross last remained had XXXX position. XXXX the in expand billable in represented compared XXXX million year. during billable for from and

QX, QX for of quarter margins gross the and XX.X% XX.X% XXXX Our compared first XXXX. of in were of in revenues XXXX to XX.X%

as XX.X% in profit we XXXX. we that from had of was which Our QX invested and future securing due reported to higher XX.X% analytics bench down services margins hard-to-find costs expanding data decline in was of engagements. capability and resources This segment for

XXXX. compared to gross quarter in XX.X% staffing services IT margins Our first XX% QX, segment had of

XXXX. higher revenues amortization XX.X% from the of and direct that with XXXX. higher the the or or share XXXX QX, diluted those on the QX, performance. in first of new acquired compared as GAAP year operating to Given reflected $X.X this XX.X% XX% of margin Exclusive in largely was million and QX, QX were quarter compared we The the first higher represented diluted expenses quarter sets. quarter revenues of our XX.X% payroll $X.X of per load revenues XXXX occurs intangible million advanced very margins are compared skill pleased $XXX,XXX net historically of $X.X technology percent in of per revenues or in XXXX of toXX.X% [ph] in higher expenses deploying income was for $X.XX SG&A improvement assignment $X.XX to assets, tax last XXXX. QX, in a share corresponding million

non-GAAP income or $XXX,XX per $X.XX quarter in XXXX share to diluted share of $X was QX, $X.XX compared for XXXX. net corresponding Our million diluted the per or

our by will still to our million line amend million existing which Addressing our availability. website. had credit to million revolving SG&A amendment position, two assets desired results it adequate And acquisition. three, related Security The cash us were at through credit give give revolving improve we of our took outstanding ratio senior unused by balances manage an of borrowing executed our which financial $X our the million first amendment fees expense our line stock-based on to Exchange March quarter $XX in $X stress items of which financial XX, our in XXXX Commission credit under included million available in of million amortization provision benefits we InfoTrellis reduces efficiency. covenants debt our mechanics acquired approximately net $XX.X amendment this his intangible we XXXX, will I’ll increase of our line. balances. as Two, we our that the week, net hand period filed and I lower First $XX.X measures, amendment At further bank of will lower under end, with [ph] I and tax and earnings by of full to proactive $X leverage not $X to fees the want without is improve yesterday. -- QX with the Line what of flexibility non-GAAP bank recall XXXX is financial one earn-out million XX, our how credit the adjusted do are last which that more and was during To will turn detailed and were comments. the management Form-XK the and facility. our steps cash which our flexibility, for facility. increase the our described of availability quarter Vivek end our still year to were cash The over Swing now we compliance increase all release, call the us March in on compensation

Vivek Gupta

XXXX, Good upon that morning, very ahead. clearly detailed exciting Mastech to everyone. the financial Digital. I’m lie of an our review the Thank by you QX, quarter opportunities encouraged ability our capitalize performance for Jack for growing and

support results our that management our quarter investment continued First belief focus in well funded. and recent our business are

for financial we during a were consecutive Our exciting first business continued accomplishments second our number analytic results the lumpiness quarter quarter XXXX business of were segments. We services it pipeline by some and in projects historical both of quarter to revenues and the the despite to services. first secured Data positive to close demand XX%. strong expand and able in for see

This data enhancing existing somewhat investment and big As master initiative double QX, delivery XXXX levels. margins results manning have management practice upgraded Art to to which from several down ability center attract new our reflected Jack mentioned in Chennai, organization facility April expanded offshore of amenities within delivery infrastructure give workforce In our nearly offering. gross which data our in capacity and global XXXX, top our with will talent. capabilities India from were quality we and our us provides the service State

to expand initiative and of in organization sales look earnest continue we in to Additionally, our XXXX. upgrade started QX that and

first a quarter income levels grew services are basis from improve secure business XXXX operationally while a assignments organically, largely XXXX. advanced recruitment our of by a investment cost improvement operating lower technology in in as points XX%, and the IT structure segment basis of to This year-over-year at in XXXX had of and sets remain by recruitment $XXX,XXX skill improvements Our QX of QX, million revenues QX our also margins Activity increased in XXXX. On of that staffing initiative gross nice $X.X seeing percentage more all during robust XXXX. same XXX with has to we us we made overall from effectiveness allowed revenue. very

very at the of logos. are we During the core change billable from very business XX employees expansion In quarter the the The by securing and to as open at your quarter some Overall, about good [ph]. to empowered that top Mastech the XXXX. very as well as consultant I we session high the talent new occurring I that questions. company is existing our blossoming summary, XX, consultant first December about creativity through future. XXXX at for base the throughout to line prominent prospects clients is or quality the headcount is will challenge for growth and entire our of the Digital disposal today feel our -- now moral status we X% to delivered, added

Operator

Instructions]. [Operator you. Thank

Sutherland Bill is with Our the your Please question. question with first Company. Benchmark from proceed

Bill Sutherland

kind that how of was growth thinking quarter morning taking we and you. group analytics I situation or for Thank and quarter for is the thanks data good pace is with forward be curious in whether picture over lumpy? that just going more question. that's Hey, about a that the impressed and the should

Vivek Gupta

Vivek here. this Bill, is

make We've and like, existing get come the all, said but are so the mix. been that guidance, new my not piece to way of to encouraged We've pipeline we from building like also that customers. to the logos future very our been the way. projects as statement into as is projects that First able the give of don't kind say are able what the I add new to we I some looks I some in should would a by

trend project-based be projects encouraging in lumpiness if down could projects, in there So the taking there in lumpiness business, very but a in projects quarter – it's could some I be specific because it's be mean, would project so coming a a which is business one off may, the many that.

factor robustness we that pipeline. as of the well at we the So look must in while

Bill Sutherland

duration average project this the at point? is What

Vivek Gupta

to would it Typically be months. nine six

Bill Sutherland

kind are don't of Okay. sector your in And if seen what this main I've -- focuses if analytics? do in business have and the I data – line, you I'm know

Vivek Gupta

main are you I you your talking didn't when about… quite sectors, question, say

Bill Sutherland

data that all end your in analytics you principally The group? markets served and

Jack Cronin

add I the or…. market end mean, in industries vertical

Bill Sutherland

Yes

Vivek Gupta

Okay.

So on essentially from to tense they are customers be we retail, –we geographically in are but are don't maybe addressing from to coming business I working right the more by verticals, and mean side lot and are vertically, a process focus, we more but design, financial and so doing with – get insurance we focus healthcare not industry now organized that's – time. are services period all segment the accident there than going will from not the we the say, but of over by a I activity really we more vertical

Bill Sutherland

me you And to deployment if from could going Thanks. for Okay. as plans capital last speak forward? then one your

Vivek Gupta

you repeat Bill, sorry, can – question? the

Bill Sutherland

On capital what is and cash to you your your – look as deployment cash priorities at generate? of you what expect uses your

Jack Cronin

I step Bill. take at Again, let think, me a that

to what of at I we're I on of organic capabilities, staffing the think expand IT but the any think We're looking we're strengthen analytics some term have sort data least investments, near to looking and not in the looking significant driven but acquisitions. make that side, do to investments. we

Bill Sutherland

again. Thanks Okay.

Jack Cronin

you. Thank

Operator

this to closing [Operator back I'd turn questions to further the Vivek Instructions]. There At this point at for call time. comments. are Gupta no like

Vivek Gupta

joining we questions you and operator. for July or call late further Thank Thank no sharing you, would you quarter are look today I early our our results you. with to second there August. like forward If XXXX to in thank

Operator

This today's concludes conference.

we lines your And your you thank for at may participation. disconnect You this time.

Mastech Digital (MHH) 26 Apr 182018 Q1 Earnings call transcript